HomeMy WebLinkAboutAgenda - 04-05-2011 - 4gGRANGE COUNTY
BOARD CF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 5, 2011
Action Agenda
Item No. <{- ° q
SUBJECT: Resolution Calling for a November 8, 2011 Special Advisory Referendum
Concerning the Levy of aOne-Quarter Cent (1/4¢) County Sales and Use Tax
DEPARTMENT: Manager & Financial Services PUBLIG HEARING: ~YlN} No
ATTACHMENT(S): INFORMATION CONTACT:
1) Resolution Calling for a November 8, Frank Clifton, County Manager, 245-2300
2011 Special Advisory Referendum Clarence Grier, Financial Services
Concerning the Levy of a One- Director, 245-2453
Quarter Cent (1/4¢) County Sales Michael Talbert, Financial Services, 245-
and Use Tax 2153
2) North Carolina General Statute -Article
46 One-Quarter Cent (1/4¢) County
Sales and Use Tax
3) 3/29/11 Memorandum from Board of
Elections Director Tracy Reams
PURPOSE: To consider a Resolution Calling for a November 8, 2011 Special Advisory
Referendum Concerning the Levy of aOne-Quarter Cent (1/4¢) County Sales and Use Tax.
BACKGRGUND: Local governments in North Carolina have historically relied heavily upon ad
valorem property taxes as their major source of revenue. For a number of years, the Urange
County Board of County Commissioners, the Noah Carolina Association of County
Commissioners and many other local governing boards across the state lobbied the North
Carolina General Assembly for legislative authority tv expand counties' revenue options,
thereby lessening counties' reliance on property taxes.
During the 2001 legislative session, the North Carolina General Assembly granted county
boards of commissioners the authority to levy, subject to voter approval, an additional one-
quarter cent X114¢} county sales and use tax referred to as the Article 46 sales and use tax. As
authorized by the General Assembly, the Article 46 sales tax cannot apply to consumer food
purchases. There is also no legislative requirement, ar mechanism, for counties to share the
additional one-quarter cent sales tax with municipalities.
Between November 1, 2007 and December 31, 2010,11 referendums on the quarter-cent sales
tax have been held in 53 counties. Cf those 11, 18 were approved and 59 failed. This year one
referendum has been held to date and the quarter-cen# sales tax was approved in Halifax
County on February 1, 2011. There are two referendums scheduled for the remainder of 2011
- Cabarrus County is scheduled for May 11, 2011 and Buncombe County is scheduled for
November 8, 2011,
A Special Advisory Referendum Concerning the Levy of a Gne-Quarter Cent X114¢} County
Sales and Use Tax was held in Grange County on November 2, 2010. The election results
were 20,896 votes cast FGR and 21,953 votes AGAINST an additional one-quarter cent X114¢}
county sales and use tax. The first possible date the Board can consider for a Special Advisory
Referendum Concerning the Levy of a Gne-Quarter Gent X114¢} County Sales and Use Tax
referendum, is November 8, 2011. North Carolina General Statutes 105-455 states that "The
county board of elections shall fix the date of the special election, except that the special
election shall not be held on the date or within 60 days of any biennial election of county
officers, nor within one year from the date from the date last preceding special election under
the section."
Although a public hearing is not required by the North Carolina General Statutes, the Board
held a public hearing on March 15, 2011 to solicit comments from the public on a possible
November S, 2011 Special Advisory Referendum Concerning the Levy of a Gne-Quarter cent
X114¢} County Sales and Use Tax. After the public hearing, the Board discussed the potential
referendum and directed staff to place the attached Resolution Scheduling a Special Advisory
Referendum Concerning the Levy of a Gne-Quarter cent X114¢} County Sales and Use Tax on
the April 5, 2011 meeting. The Board also directed staff to schedule a public hearing at the
April 5, 2411 meeting on the possible uses for the potential proceeds from the additional sales
tax if approved by voters. That public hearing is on the agenda later during this April 5, 2011
regular Board meeting.
It should be noted that, according to Board of Elections Director Tracy Reams, the Board of
Commissioners needs to make a decision on or before Au ust 23 2011 regarding a possible
November 8, 2011 one-quarter cent X114¢} county sales and use tax referendum in order to
provide the necessary time to fully prepare for the November election. This timeframe allows
for the coding and programming to include the referendum and appropriate time to print and
receive ballots. The Board of Elections is required to have absentee ballots on site and ready
to mail by September 19, 2011.
Attachment 1 is a resolution for Board consideration calling for a special advisory referendum
on the November 8, 2011 ballot on the question of whether to levy the Article 46 one-quarter
percent county sales and use tax in Grange County.
As detailed in the resolution, the November 8, 2x11 ballot question would ask Grange County
voters to vote for or against a local sales and use tax at the rate of ane-quarter cent in addition
to all other state and local sales and use tax. It should be noted that the ballot question cannot
include language regarding proposed uses of the funds from the one-quarter cent tax. A
"sunset clause" can also not be included on the ballot question. Any action to subsequently
sunset.an implemented sales and use tax would require additionallseparate Board action. A
November 8, 2011 ballot question would appear as follows.
[ ]FOR [ ]AGAINST
County Sales and Use Tax
Local sales and use tax at the rate
of one-quarter percent X0.25°/Q} in
addition to all other State and
local sales and use taxes.
The attached draft referendum resolution does not include language regarding the possible
uses of the potential funds from the one-quarter cent sales tax.
Pending approval of the attached referendum resolution, the Board may also want to consider
discussing any public education efforts to ensure voters are knowledgeable regarding the ballot
question. The North Carolina Association of County Commissioners recommends that counties
undertake a public education campaign to educate voters. The County did undertake a public
education effort for the previous November 2010 sales tax referendum. It is proposed that a
potential public education effort be considered for discussion at the April 7 Board work session
and Board action as appropriate be considered at the April 19, 2011 regular meeting.
If the Board of Commissioners does decide to move forward with a referendum and a majority
of voters approve the sales tax referendum, the Board will be required to give ten X10} days
public notice of the Board's intent to levy the tax. The Board would then hold a required public
hearing and consider a new resolution to actually levy the tax. The Board must adopt that
additional resolution in order for the tax to take effect. Based on election certification
timeframes, the Board of Commissioners' regular meeting schedule, and timing and other
requirements associated with the North Carolina Department of Revenue and North Carolina
general Statute 105-456, the earliest date the additional sales tax could become effective
following a November S, 2011 referendum would be April 1, 2012
FINANCIAL IMPACT: There is no financial impact associated with consideration of the
Resolution Calling for a November 8, 2011 Special Advisory Referendum Concerning the Levy
of a Dne-Quarter Cent X114¢} County Sales and Use Tax.
If a majority of~voters approve the sales tax, and the Board of Commissioners implements the
sales tax as soon after the November 8, 2011 referendum as possible, it could have an
effective date of Apr"rl 1, 2012. Approximately $525,000 would be generated during the
remainderllast quarter of FY 2011-12. As an additional revenue source in the following years,
the sales and use tax would generate approximately $2,500,000 annually for the County.
The County will incur a cost of approximately $84,500 with the placement of the refierendum on
the November S, 2011 ballot. Currently, the November 8, 2011 election only includes municipal
issues and the towns are responsible for the costs. However, if the County schedules a
referendum, a majority of the election costs became the responsibility of the County. This
assumption by the County of the majority of election costs is further explained in Attachment 3
from Board of Elections Director Tracy Reams.
RECOMMENDATION(S): The Manager recommends that the Board review, discuss, and
consider the Resolution Calling fora November 8, 2011 Special Advisory Referendum
Concerning the Levy of aOne-Quarter Cent (1/4¢) County Sales and Use Tax.
Contingent upon approval of the referendum resolution, staff will plan for 1 }Board discussion at
the April 7 work session on the possible uses of the potential sales tax funds in follow-up to the
public hearing that appears on the agenda later during tonight's regular Board meeting; 2}
Board discussion on a potential public education effort; and 3} potential Board action at the April
10, 2011 regular meeting on a second resolution regarding the planned uses of the potential
sales tax funds.
~- ~CS-ao~l-o~~
4
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION CALLING FOR A NOVEMBER 8, 2011 SPECIAL ADVISORY
REFERENDUM CONCERNING THE LEVY OF AONE-QUARTER CENT (1/4¢)
COUNTY SALES AND USE TAX
WHEREAS, the North Garolina General Assembly has enacted the "Gne-Quarter
Cent X114¢} Gounty Sales and Use Tax Act," Article 46 of Chapter 105 of the
North Carolina General Statutes Session Law 2007-323}, which authorizes
counties to levy a local sales and use tax; and
WHEREAS, in order to levy the local sales and use tax, the County of Grange
must conduct an advisory referendum in accordance with the provisions of the
North Carolina General Statutes Section 163-287;
NOW, THEREFORE, BE IT RESGLVED by the Orange County Board of
Commissioners that:
Section 1: In accordance with the North Garolina General Statutes, a special
advisory referendum is hereby called to be held between the normal time the
polls are open on Tuesday, November 8, 2411, at which there shall be submitted
to the qualified voters of the County of Grange the question set forth in Section 3
of this Resolution.
Section 2: The Grange County Board of Elections shall conduct said
Referendum.
Section 3: The ballot question shall be in the following farm:
[ ]FOR [ ]AGAINST
Local sales and use tax at the rate of one-quarter percent (0.25%) in addition
to all other State and local sales and use taxes.
Section 4: The Glerk to the Board of Commissioners is authorized and directed to
transmit a certified copy of this Resolution to the Orange Gounty Board of
Elections within three ~3}days after the passage hereof.
Section 5: The Board of Elections shall publish legal notice of the special
advisory referendum in accordance with North Carolina General Statutes Section
163-287.
Section 6: This Resolution shall take effect upon its passage.
ADGPTED this the 5~"day of April , 2011.
A~1, + a 5
Article 46.
One-Quarter Cent (1/4¢) County Sales and Use Tax.
§ 105-535. Short title.
This Article is the one-Quarter Cent X114¢} County Sales and Use Tax Act.
12007-323, s. 31.17~b}.}
§ 105-536. Limitations.
This Article applies only to counties that levy the first one-cent ~ 1 ¢} sales and use tax
under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the
first one-half cent X112¢} local sales and use tax under Article 40 of this Chapter, and the
second one-half cent X112¢} local sales and use tax under Article 42 of this Chapter.
X2007-323, s. 31.17~b}.}
~ 105-537. Levy.
~a} Authority. ~- if the majority of thaw voting in a referendum held pursuant to
this Article vote for the levy of the tax, the board of county commissioners may, by
resolution and after 10 days' public notice, levy a local sales and use tax at a rate of
one-quarter percent X0.25%}.
(b} vote. -- The board of county commissioners may direct the county board of
elections to conduct an advisory referendum on the question of whether to levy a local
sales and use tax in the county as provided in this Article. The election shall be held on a
date jointly agreed upon by the board of county commissioners and the board of elections
and shall be held in accordance with the procedures of G. 5.163 -287.
~c} Ballot Question. -~ The form of the question to be presented on a ballot for a
special election concerning the levy of the tax authorized by this Article shall be:
"" ~ j FaR ~ AGAINST
Local sales and use tax at the rate of one-quarter percent (0.25%} in addition
to all other State and local sales and use taxes."
~d} Limitation. _ A tax levied under this Article may not be in effect in a county
at the same time as a tax levied under Article 60 of this Chapter. X2007-323, s. 31.17~b}.}
§ 105-538. Administration of taxes.
Except as provided in this Article, the adoption, levy, collection, administration, and
repeal of these additional taxes must be in accordance with Article 39 of this Chapter.
G.S. 105-465.1 is an administrative provision that applies to this Article. A tax levied
under. this Article does not apply to the sales price of food that is exempt from tax
pursuant to G.S. 105-164.13B ar to the sales price of a bundled transaction taxable
pursuant to G.S. 105-467~a}~5a}, The Secretary shall not divide the amount allocated to a
county between the county and the municipalities within the county. X2007-323, s.
31.17~b}; 2007-345, s.14.5~a}; 2008-134, s. 75; 2009-445, s.18.}
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